April 03, 2005

Income and the Millennium Ecosystem Assessment

The Millennium Ecosystem Assessment (MEA) features twice in this week’s issue of Nature. There we can see contradictory statements by different members of the Core Team that wrote the summary report. In a news item on page 547 Robert May says that "GDP can't quantify quality of life and sustainability." In an essay on page 561 Harold Mooney, Angela Cropper and Walter Reid use monetary income as a major indicator of human well-being: “Although there has been a steady increase in many indicators of human well-being in many parts of the world – such as an increase in personal wealth, a longer lifespan and access to plentiful and inexpensive food – these benefits have not been universally distributed. There are still more than one billion people surviving on less than one dollar a day and nearly that many are undernourished.”

Money is a pretty good indicator of well-being. I am better off with more money. But the relationship between income and well-being is imperfect. While every year millions of people pay hundreds or thousands of dollars to spend a week at a sunny beach, many more millions do not have that much money but live by the beach and enjoy warm weather year-round.

The relationship between income and well-being is also nonlinear. While the income gap between the poorest and the richest grows, the gap in health and lifespan shrinks. According to the MEA report, more than 150 million people are well nourished despite earning less than a dollar a day.

Do the authors of the MEA report disagree among themselves? I believe not. I think each of them, and the report, holds an inconsistent view of GDP. They tend to be very worried about inequality, and use income data to support their position. They also tend to be suspicious about material prosperity, which they associate with ecosystem destruction, and thus dismiss income data as a measure of well-being.

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